#TimeToBuild Resilience into the Business
Building resilience into the business is important. Whether it is creating business continuity plans or assessing risks to the business or its employees, it is imperative that companies prepare to weather bumps in the road. At the same time, companies should also pay attention to the infrastructure surrounding their companies and the changes that can affect them as well. Whether opting to keep the status quo—with the potential for decreased quality and service—or choosing to invest in the development of safe, high quality, and reliable infrastructure; both have long-term economic implications.
During remarks in Cincinnati in June, President Trump echoed his “America First” pledge. A big part of his checklist to accomplish this pledge is infrastructure. He stated his plan to build “first-class infrastructure” that would “restore American industrial might.” The method to accomplish his vision is by “generating $1 trillion in infrastructure investment” with $200 billion in federal funding over the next decade, and the remainder to be raised by a public-private partnership that has yet to be outlined and could be affected with the passage of a tax plan.
Earlier this year, a “priority list” attributed to then President-elect Trump was released detailing 50 priority infrastructure projects that were already underway. The projects selected ranged from $125 million-$14.2 billion, totaling $137.5 billion. Which projects will make the final cut is uncertain. Although the president originally planned to attack infrastructure in his first 100 days in office, U.S. Transportation Secretary, Elaine Chao, recently indicated that infrastructure is on hold until tax reform has been completed. Improving infrastructure is a pressing need and investments in this area could spur additional manufacturing growth as China’s infrastructure investments have.
Below we highlight some key areas where it’s #TimeToBuild so that manufacturers can compete and prosper:
Transportation – Without our roads, bridges, rails, ports, and airports, employees can’t make it into work and product is stranded. However, building simply to build is foolish; continued repair and maintenance work serves only to put a temporary Band-Aid on the crumbling issues. The infrastructure plan must come with solutions that are not only safe but are also forward-looking. This means fixing today’s immediate issues with a vision five to 10 years and beyond. It needs to consider and influence the way people and businesses operate. What will make it better? How do people and businesses want to live and engage now? How do they want to live and operate in the future? It must think through ways to assist in moving people and products more efficiently and safely from point A to point B. Will this mean:
- More intermodal shipments to alleviate congestion?
- Increased rail and light rail systems for commuters?
- Increased drone usage?
- More charging stations for electric cars, buses, trucks, and trailers?
It must envision the methods we will be using in the future to move people and products to provide mobility and accessibility. Current levels of congestion cost $160 billion every year in lost productivity. Technologies that can facilitate tracking, reduce congestion, and improve transit times will certainly improve reliability, decrease costs and lower emissions. The spending must also be strategic to get the biggest bang for the buck. Part of the focus should be on the largest metropolitan areas, which serve as the cores for our economy and produces three-quarters of the nation’s GDP. The resilience, modernization, and accessibility of these areas are key.
Water – While water runs underground, its necessity can neither be overlooked nor buried. It is essential for life: public health, fire, and economic prosperity depend on water. Everyone and everything needs water. However, the millions of miles of pipes contained in our current system are quickly reaching the end of their useful life. Moreover, they do not reach the entire population. The estimated investment needed for the country’s water infrastructure is more than $1.7 trillion over the next 25-40 years. This investment will help restore the pipes and help address the population growth that has occurred in our country. Each year, we experience roughly 240,000 water main breaks. Delays in confronting this issue can translate to money down the drain, worsening water service, increased interruptions, and ballooning emergency repair costs (not to mention the chaos caused when a pipe from 1860 breaks ahead of morning rush hour traffic). Moreover, the stakes can be dangerous and high-profile. The lack of investment coupled with poor oversight and regulation can lead to situations similar to what happened in Flint, Michigan, or other equally devastating effects.
Energy – Failures around our energy infrastructure have the potential for catastrophic consequences: oil pipeline ruptures, gas explosions, and exploding transformers. Our national infrastructure comprised of “approximately 2.6 million miles of interstate and intrastate pipelines; about 640,000 miles of transmission lines; 414 natural gas storage facilities; 330 ports handling crude petroleum and refined petroleum products; and more than 140,000 miles of railways that handle crude petroleum.” The conversations around energy cannot revolve solely around repairing but must find ways to modernize, improve safety, and increase its resilience in the event of severe storms, attacks, or other potential disruptions. These innovations require an open mind. In 2011, a Marine Corps company went into a war-torn area of Afghanistan with solar panels and LED lights. They found the materials resilient and effective in that area. Identifying and exploring diverse solutions for power goes beyond “being green;” it is an essential component of the strategy to increase our energy infrastructure resilience. Safety and resilience should be top of mind when evaluating solutions to power our country and economy into the future. These necessary changes result from age and the need to prepare to face upcoming challenges like climate change, embrace the use of new technologies, and the continual need for enhanced national security measures in the face of continued terrorism and cybersecurity threats.
Telecommunications – The connectivity and efficiencies generated by IoT and the lightning advance of telecommunications in the past quarter-century are remarkable tools to be harnessed and deployed to improve business and everyday lives. Improvements in digital telecommunications can improve operations by helping leaders better understand their businesses, its needs, as well as those of the customer. The data generated can be a treasure trove of information to help unlock opportunities for investment and growth; however, investments into the system need to be forward thinking to prevent becoming obsolete. Moreover, this swift advance must be matched by appropriate investments in security, training, and other prevention tools.
To get to the next level, the president is correct; the U.S. must invest in its aging infrastructure not just as a maintenance issue but as a part of the strategy to modernize and continue to allow its companies and people to succeed, prosper, and be safe. No one solution will address all issues, and that is why there needs to be awareness of the problems and collaboration to fix them. The solutions will require the public and private (and possibly even the non-profit) sectors to pool resources, genius, and accountability to make transformative and sustained changes to our infrastructure. Infrastructure, after all, is not only about how much you build or move, but also about creating access to greater avenues for opportunity.